EVENT DETAILS:
- Date & Time: Monday, 12/17 @ 2:00PM ET
- Dial-In & Video Link: To be provided in a follow-up invite
- Add Call Details to Outlook Calendar: CLICK HERE
We always need to be refreshing our ideas. In this round we reviewed ~10 new names and came away with ~2 new ideas (so far) that we want to share with you: PLAN Long and SPLK Short. Neither of these will be presented in deep dive format, but only just the starting point of analysis.
Anaplan Inc. [NYSE: PLAN, $3.3b Cap] is a winner in the growing enterprise planning market. The company's products tend to land in the finance suite with better planning, integration, and budgeting tools for things like sales commissions, forecasting, and project budgeting, but then widen out across the enterprise for flexible, integrated planning tools. The company has been both creating a market using sophisticated software replacing traditional use of spreadsheets, and also taking share from existing players in the market (such as our old friend CALD whom SAP gobbled up earlier this year). We are bullish on Anaplan's secular penetration opportunity, acceleration in execution, market share gains, and leadership.
Splunk Inc. [NASD: SPLK, $15.9b cap] is a winner in the big data + analytics markets. The company was an early mover in the ingestion and indexing of machine log data, and created a powerful set of APIs which allow Splunk users to search and use the data for an ever growing set of unique use cases. There are many items we have always loved about this model, and this company, and we still see some residual long-term potential (or theoretical) upside. But in the near term we also see correlation to some trend lines of investment that we think slow in the coming months and years. We think the slowdown will mean investors will need to pivot from EV/S to EV/FCF to Growth. These transitions aren’t always fluid and in the case of Splunk there is the bugaboo of ongoing large SBC to sort through. We are also aware of more commoditizing forces of late in this category, such as the separation of elastic compute and storage in the cloud, which could also dent growth as Splunk's model mostly prices both at the more expensive side. We are not telling Longs to hit the competition-panic button, but the combination of slower growth and shift to FCF based valuation will at least present a sideways equation, and in our view sets up for a 20-25% downside risk profile as we enter 2019.
Join us Monday 2pm!
Please call or e-mail with any questions.
Ami Joseph
Managing Director
Yosef Vaitsblit
Analyst
